Abercrombie & Fitch may try to attract "cool, good-looking" customers and employees, but the retailer's financial performance is just ugly. So much for summer girls, and anyone else for that matter, liking Abercrombie.
Teens, particularly girls, are ditching Abercrombie as well its sister brand Hollister. Same store sales, a key measure for retailers, tumbled 10% during the second quarter, leading to worse-than-expected earnings and revenue for the retailer. Shares of Abercrombie (ANF) plunged nearly 18% Thursday following the earnings news.
Will things turnaround soon? Fat chance. Abercrombie said same-store sales next quarter will be down even more, and its earnings outlook was far below what analysts were predicting. The company didn't even offer guidance beyond the third quarter "due to a lack of visibility given recent traffic trends."
The retailer, as well as rivals American Eagle (AEO) and Aeropostale (ARO) have been struggling for some time now as the tastes of teens and young millennials have shifted from classic jeans, logo T-shirts and hoodies toward more fashion-forward chains like Forever 21, H&M, as well as Urban Outfitters (URBN), which delivered strong results earlier in the week.
Through Abercrombie failed to warn earlier in the quarter that it would deliver poor results, the Twittersphere didn't seem all that surprised.
"Abercrombie & Fitch's 2Q net income down 33 percent"- this happens when your customer base is fickle, w/constantly changing tastes—
Jaret Landon (@JaretLandon) August 22, 2013
$anf had its run. It was a fad not a consistent fashion leader. Low quality clothes that aren't fashionable anymore.—
Mark (@strengthofalion) August 22, 2013
Retail is in challenging environment. $ANF in trouble. Core customer moved on and spent on cell phones, video games and sneakers.—
Jassem el Mahmoud (@jemfinancial) August 22, 2013
Some also speculated that company's financial troubles may be a result of Abercrombie's CEO Mike Jeffries comments from 2006, which were resurrected in May after a retail expert suggested that the company may not carry XL and XXL sizes for women because it doesn't consider plus-sized women to be among the "cool" teens it's going after.
In an interview with Salon.com more than seven years ago, Jeffries said that the company hires "good-looking people" because they attract "other good-looking people, and we want to market to cool, good looking people."
Abercrombie: If you make clothes for thin people and cool kids only, then u shld've seen this coming—
Sammyrue Vazh (@SammyVazh) August 22, 2013
Others were hoping Abercrombie's dismal results may force it to rethink the way it does business beyond just its marketing strategy.
it brings me an odd degree of joy to watch Abercrombie & Fitch plummet. maybe the 10% drop in sales means they'll turn the music down. $ANF—
Jeffrey KGB (@JeffreyKGB) August 22, 2013
Facebook shares rallied an impressive 30% Thursday, allowing the stock to book its best one-day gain ever. And while shares remain about 10% below the May 2012 IPO price of $38, analysts are predicting that Facebook is finally on its way to reaching, and even crossing, that threshold.
"Facebook delivered its strongest quarter yet as a public company -- results that we think could be thesis-changing for many," said Doug Anmuth, a MOREHibah Yousuf - Jul 25, 2013 4:03 PM ET
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First Solar shares spiked more than 50% Tuesday, rising to a new 52-week high and triggering several circuit breaker on the way up after the company issued a bullish forecast for the year.
The solar panel maker said it expects to earn between $4 and $4.50 per share, with annual sales between $3.8 billion and $4 billion. The guidance was well above analysts forecasts. Those polled by Thomson Reuters have been MOREHibah Yousuf - Apr 9, 2013 3:31 PM ET
Anyone can reinvent themselves as the saying goes. While Cisco has been doing just that, some think it's gotten a little too ambitious.
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Facebook beat fourth-quarter earnings and revenue estimates, and improved mobile ad sales, but investors weren't all that impressed.
Facebook (FB) stock tanked 10% within minutes in after-hours trading following the earnings release. But the stock nearly fully recovered before edging lower again as CEO Mark Zuckerberg, CFO David Ebersman and COO Sheryl Sandberg answered questions from analysts on a conference call. Shares were down 4% at the conclusion of the call, MOREHibah Yousuf - Jan 30, 2013 6:50 PM ET
JPMorgan (JPM) CEO Jamie Dimon says the U.S. economy is poised to boom if Washington lawmakers can strike a deal to avoid the fiscal cliff.
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Abercrombie & Fitch's stock surged more than 30% Wednesday, logging the biggest one-day jump since its stock market debut in 1996.
The big move came as the teen retail giant posted its first quarter of year-over-year profit growth in a year. For the three months ended Oct. 27, Abercrombie earned $71.5 million, or 87 cents per share, up 40% from a year earlier. Overall revenue rose 9% for the quarter to MOREHibah Yousuf - Nov 14, 2012 12:16 PM ET
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